Correlation Between Signature Resources and Sulliden Minerals
Can any of the company-specific risk be diversified away by investing in both Signature Resources and Sulliden Minerals at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Signature Resources and Sulliden Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Signature Resources and Sulliden Minerals SA, you can compare the effects of market volatilities on Signature Resources and Sulliden Minerals and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Signature Resources with a short position of Sulliden Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Signature Resources and Sulliden Minerals.
Diversification Opportunities for Signature Resources and Sulliden Minerals
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Signature and Sulliden is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Signature Resources and Sulliden Minerals SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sulliden Minerals and Signature Resources is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Signature Resources are associated (or correlated) with Sulliden Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sulliden Minerals has no effect on the direction of Signature Resources i.e., Signature Resources and Sulliden Minerals go up and down completely randomly.
Pair Corralation between Signature Resources and Sulliden Minerals
Assuming the 90 days horizon Signature Resources is expected to generate 0.51 times more return on investment than Sulliden Minerals. However, Signature Resources is 1.98 times less risky than Sulliden Minerals. It trades about 0.18 of its potential returns per unit of risk. Sulliden Minerals SA is currently generating about 0.06 per unit of risk. If you would invest 3.50 in Signature Resources on August 29, 2024 and sell it today you would earn a total of 1.00 from holding Signature Resources or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Signature Resources vs. Sulliden Minerals SA
Performance |
| Timeline |
| Signature Resources |
| Sulliden Minerals |
Signature Resources and Sulliden Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Signature Resources and Sulliden Minerals
The main advantage of trading using opposite Signature Resources and Sulliden Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Signature Resources position performs unexpectedly, Sulliden Minerals can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sulliden Minerals will offset losses from the drop in Sulliden Minerals' long position.The idea behind Signature Resources and Sulliden Minerals SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Sulliden Minerals vs. First Majestic Silver | Sulliden Minerals vs. Ivanhoe Energy | Sulliden Minerals vs. Orezone Gold Corp | Sulliden Minerals vs. Faraday Copper Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |